I already paid for the first month but want to cancel it and switch to a new company. If I don’t pay the next bill, will it cancel my policy or cause any trouble (like a fee)?
No, insurance doesn’t work like that. If you stop paying, they can’t just cancel you immediately. They have to cover you for a period, and you’ll still owe for those days. Eventually, they will send the balance to collections, and that can harm your credit. Insurance companies also share info about cancellations, and that can make it hard for you to get coverage in the future. It’s a bad idea.
The best way to do it is:
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Secure the new insurance you want and set it to start on Day X.
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Call your current insurance company, request cancellation effective Day X. You might owe a bit more money, but it’s not a scam. They may charge you a short-rate cancellation fee, which is usually about one month of premium.
Once that’s done, you’re good to go.
That’s a really bad idea. Once you have the new policy, call the old company and cancel it.
No, they’ll continue to bill you until you officially cancel. They’re required to keep you insured for a while, just in case you forget to pay and get into an accident. They’ll bill you for the extra time, and then you’ll need to cancel anyway. Once you cancel, you’ll have to provide proof of your new policy. They will backdate your cancellation and refund you for any overpayment, but it’s a hassle.
Just call and handle it with Jake. It’s easier that way.
Why don’t you want to make the call?
Mal said:
Why don’t you want to make the call?
This is my first insurance policy, so I’m nervous about calling.
Mal said:
Why don’t you want to make the call?
This is my first insurance policy, so I’m nervous about calling.
While technically an answer, it’s not very helpful. It would be good to hear more details if possible.
Mal said:
Why don’t you want to make the call?
This is my first insurance policy, so I’m nervous about calling.
So what? They’re not going to reach through the phone and hit you. It’s just like any other phone call where you have to handle something awkward. How do you deal with other uncomfortable phone calls?
Get your new insurance policy, then call the old one and cancel. It’s really that simple. If you want, you can wait until the day the bill is due so you don’t pay for any extra time. I deal with cancellations all the time, and I promise the person on the other end won’t be offended.
Call them to cancel. If you just stop paying, they will still cover you until the final payment date. Then you’ll owe the balance, and if ignored, it could go to collections.
Yes, but that’s not a smart way to cancel anything.
Just so you know, I started using an independent agent to shop for insurance, and they took care of canceling my State Farm policy for me. It’s much more convenient. The agent shops around for you and helps you with the whole process, and you don’t pay any extra. It saved me about $100 a month for better coverage too.
If you stop paying, they will keep billing you for a while, then send a cancellation notice and send the balance to collections. This will hurt your credit. Ignoring them is not the same as calling to cancel on your terms. If you call them, they won’t send you to collections. Just get a new policy, then call them to cancel.
You can cancel, but it doesn’t look good when you try to get new insurance. You’ll typically get a refund for any unused premium, but like others said, get the new policy first.